Fall 2017 #19 a
Why is Fair Value Liabilities (other than loss and lae reserves) not included in the list of components of FV(liabilities)? It is given and included in the FV Liabilities calculation in Fall 2016 #18.
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Why is Fair Value Liabilities (other than loss and lae reserves) not included in the list of components of FV(liabilities)? It is given and included in the FV Liabilities calculation in Fall 2016 #18.
Comments
I think the person who created the 2017-Fall Q19a exam question just copied the bullet point list given on the first page of chapter 23 of Odomirok Financial Reporting. Those 3 bullet points are more accurately "FAIR VALUE OF LOSS AND LAE RESERVES". Then in the 2016 problem where you actually have to calculate the value of goodwill, you have to include all liabilities.
Note that liabilities other than loss & LAE are not discounted in the 2016 exam problem. The reason most likely is that those other liabilities are paid out quickly (less than 1 year) so that discounting would have no material effect. (Loss payments may be paid out over many years so for that, discounting would be material.)